Brown’s tax U-turn: new beginning or beginning of end?

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Gordon Brown on Wednesday made what the British media and opposition parties widely judged to be the most humiliating and embarrassing policy change of his short career as Prime Minister: a climbdown over concessions to those made worse off by his scrapping of the lowest, 10 pence income tax rate.

Conservative leader David Cameron, hoping to oust Brown and Labour in the next election, branded Brown a “pathetic” figure. Liberal Democrat leader Nick Clegg called him “increasingly pointless”.

Brown, they crowed, was an isolated figure, forced into what the Daily Mail said was a “humiliating U-turn” over tax policies he introduced last year in his final Budget as Finance Minister. Cameron said it was a “massive loss of authority”.

So, is he — and was it?

Undoubtedly, Brown has courted a lot of very bad press over the 10 pence issue. Claims the Labour government have done more than any other this century to help people out of poverty sounded hollow when it became clear that by abolishing a tax band he introduced, Brown was making five million households worse off. The subsequent open rebellion from
Labour backbenchers over the issue just made matters worse.

In the end, however, Brown did — although not admitting a mistake — make changes, stressing he had listened to people’s concerns and acted.

And if Brown can play it right, he may be able to convince voters increasingly turned off Brown and the Labour party that this is the mark of a good leader. “On 10p tax, he listened and acted. That is a sign of strength, not weakness,” the influential Sun newspaper said in an editorial.

Others echoed the line of rebel politician Frank Field, who led the 10p tax revolt, in urging Brown to listen on other unpopular policies. “He can start by scrapping plans to extend
detention without trial to 42 days, a proposal wrong both in principle and practice,” the Daily Mirror said.

If Brown, whom voters view as aloof compared to his populist predecessor Tony Blair, does start to show more of an ability to listen, learn and communicate, however, that may not be enough to silence the low-level chatter that has started to surface about his ability to lead the party into the next election.

Foreign Secretary David Miliband warned Labour at the weekend to stop fighting or it could damage its election chances — a move that raised eyebrows given Miliband is viewed as a possible Brown successor.

Brown has room to reassert his authority. He does not need to hold a general election for another two years, employment remains strong, moves are being made to kick-start the housing market, and the economy is still expected to grow this year.

But first he must weather some major political storms: the biggest work stoppages in a decade, unpopular changes to terror detention laws and local elections on May 1 that will be pored over for evidence of his ability to lead Labour into a fourth successive term in office. No number of visits from George Clooney can help with that.

The economy will finish him. Brown used the cash flow generated by the Thatcher reforms; easy credit and latterly a global bull market to pretend that he was the “prudent” chancellor with the golden touch. The reality is that like every Socialist chancellor before him he squandered the country’s money; the cash box is empty, the balance sheet is red and the economy has been stifled by suffocating regulation and taxes. Last time round it took 15 years from 1979 to 1994 to get the country back on track. This time it will take 20 years to repair the damage.

The Sun is in fact a comic book published in the UK that sells itself with naked ladies and football. It is in no sense a publication that can be taken seriously in reporting politics, as proved by the comment attributed to it.

Maybe its a ploy to get more and more people dependant on benefits so any party wanting to change things will find it very difficult because as Mrs Thatcher has proved…you become very unpopular if you show the tough approach which is towards lower taxes and no benefits (surely free education, health care are all the benefits anyone should need). Its funny how everyone was happy to tax the dividend on pensions until they realised they were the ‘rich’ people whose pensions were affected. If you protect the riches incomes you also protect poor. If you spend rich peoples money, then why not poor as well?

Also the Sun is read by a wide amount of people – like Eastenders and Corination Street and it might be worth noting that unlike Cuba not everyone in this country is able to read and write to a sufficient standard good enough to read or watch anything of greater substance anyway.

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Based in London, I manage our team of Reuters' text journalists and photographers here and in Dublin - covering everything from company news and economics to sport and culture. I have been with Reuters for 10 years, including three years spent covering equities in Johannesburg.